Today’s Congressional Budget Office (CBO) estimate of health insurance reform legislation reaffirms what we have said for the past year: that fiscally responsible health insurance reform is not only possible, but also is an important step toward long-term fiscal sustainability.

The new CBO estimate finds that health insurance reform will reduce the deficit by over $100 billion in this decade and by more than $1 trillion over the following 10 years. If enacted, this would be the most significant deficit-reduction package passed into law in over a decade. And it will begin to transform our health care system into one that delivers higher quality at lower cost, boosting the bottom lines of American businesses, families, and the federal government — all the while providing those with health insurance with new choices and a host of new consumer protections and expanding coverage to 32 million Americans.

By paying for itself and more, this legislation represents an important break from the way Washington has done business recently. In the first decade of this century, large, significant domestic policy initiatives—two tax cuts and a Medicare prescription drug benefit — were passed into law without being paid for, adding trillions to the deficit. That is why the President pushed for, and then signed into law, statutory pay-as-you-go (PAYGO) legislation that holds policymakers to a simple principle: if you propose new tax cuts or entitlement expansions, you must find a way to pay for them.

Some have raised concerns that the health insurance reform legislation may have fallen short of this PAYGO principle. That is simply false. CBO’s analysis shows that the combination of the Senate-passed bill and the reconciliation bill will be deficit-reducing according to statutory PAYGO standards — standards that go beyond simple deficit reduction.

In particular, the overall bill — including the Senate-passed bill and the reconciliation bill combined—generates over $100 billion in deficit reduction over the next decade (and more thereafter). For the purposes of statutory PAYGO, however, certain of the bill’s savings are not counted: namely, the deficit reduction coming from increased Social Security payroll tax revenues and from the CLASS Act, a long-term care program. But even excluding these components the combined bills generate a net reduction in the deficit, and thus are fully compliant with statutory PAYGO.

The CBO score today should leave no doubt that we are operating in a new fiscal era — one where we abide by our commitment to pay for new initiatives and take steps to restore fiscal responsibility by reining in the single biggest driver of our long-term shortfall.